Eli Lilly (NYSE: LLY) won the approval it sought when the FDA authorized the company’s oral obesity drug Foundayo
(orforglipron), but the pharma giant’s post-approval stock bounce was short-lived.
Lilly shares rose 4% from $919.77 to $954.52 on the day of the announcement. But the momentum reversed into a 2% loss to $935.58 on Thursday, and for one important reason beyond simply the overall market decline triggered by investors losing confidence in a speedy end to the Iran war.
Investors (as reflected in analysts’ mixed observations) appeared divided on how quickly Lilly can generate sales this year for Foundayo, a small molecule glucagon-like peptide-1 (GLP-1) receptor agonist. That division results from the competition shaping up on the drug’s price with obesity arch-rival Novo Nordisk (shares traded on Nasdaq Copenhagen as NOVO-B; ADRs traded on NYSE as NVO).
Novo Nordisk got a jump on Lilly in the oral obesity drug front in December when the Danish biotech giant won FDA approval for oral Wegovy® (semaglutide), a once-daily 25 mg tablet indicated for chronic weight management. Analysts consider oral Wegovy sales to have started strong, with total prescriptions reaching 577,000 and 52,000 filled during the week ending March 20.
Lilly is expected to make Foundayo available directly to patients through its LillyDirect direct-to-consumer services and support platform starting Monday. There, a starting dose of 0.8 mg is being priced at $149/month, rising to $199/month for 2.5 mg, $299/month for the 5.5 mg and 9 mg doses, and up to $349/month for the highest doses of 14.5 mg and 17.2 mg. However, high-dose patients will automatically receive the $299/month price on their first purchases and keep it if they refill their prescription within 45 days of their previous prescription.
Patients paying through commercial insurance plans will be eligible for discounts that reduce Foundayo’s out-of-pocket cost to patients for 1-, 2-, or 3-month prescription fills to $5 a month.
“A positive surprise is that the approval was for a tablet formulation, which is less expensive to manufacture” than the capsule versions studied by Lilly during clinical trials, David Risinger, a senior managing director and senior research analyst covering diversified biopharmaceuticals at Leerink Partners, shared in a research note.
Lilly told Risinger that it conducted a bioequivalence study comparing capsules to tablets, which, according to the company, can be manufactured more efficiently than capsules and use less active pharmaceutical ingredient. The high dose studied in Lilly’s Phase III trials of orforglipron, 36 mg, corresponds to the highest capsule dose of 17.2 mg.
Price competition
Lilly has sought to price its oral obesity drug competitively with Novo Nordisk’s oral Wegovy, which starts at $149/month for the lowest dose of 1.5 mg, then rises to $199/month for the 4 mg dose, with new patients paying $149/month through August 31. Prices rise to $299/month for 9 mg and 25 mg doses.
However, patients who sign up for a 12-month subscription to oral Wegovy through Novo Nordisk’s telemedicine partner-providers enjoy a $50 discount that brings their monthly cost down to $249. And commercial insurance patients who agree to local pharmacy pickup with a savings offer can pay as little as $25/month, subject to a maximum savings of $100/month.
The price competition explains why buyers of securities for themselves or clients—the “buy side” in Wall Street jargon—have lowered their 2026 forecasts for Foundayo sales by more than half, from about $4 billion to less than $2 billion, Trung Huynh, an analyst with RBC Capital Markets, wrote in a research note. Huynh cited a consensus of analysts which is projecting approximately $1.6 billion in 2026 sales, though a Reuters spot check of investment brokerages found a range for this year’s projected sales of $1.5 billion to $2.8 billion.
“Although there have been headwinds on pricing erosion in the GLP-1 space, we believe there is substantial upside with the expected Medicare Part D expansion later this year,” Huynh added. The expansion of sales to the Medicare Part D program would cap patient copays at $50 per month.
Huynh and RBC Capital have projected Foundayo will reach peak-year sales of $36 billion—14% above the $31.68 billion racked up by last year’s best-selling prescription drug, the multi-indication cancer immunotherapy blockbuster Keytruda® (pembrolizumab) marketed by Merck & Co. (NYSE: MRK).
The highest peak sales forecast comes from Citi Research, where Geoff Meacham, PhD, the firm’s head of healthcare research and a managing director specializing in U.S. pharma and biotech research, has projected more than $40 billion. At the low end, a consensus of analysts surveyed by Bloomberg News expects Foundayo peak sales to reach $18 billion by 2030.
$50M upfront
Both ends are a far, far cry from the $50 million upfront that Lilly paid in 2018 to license orforglipron, then called OWL833, from Chugai Pharmaceutical, which discovered the drug and is owned by Roche Holding (SIX Swiss Exchange: ROP and RO; OTCQX: RHHBY). Lilly also agreed to pay Chugai up to $390 million in potential payments tied to achieving milestones.
At the time, OWL833 was deemed Phase I ready for clinical studies in type 2 diabetes—the indication for which Lilly markets its GLP-1/GIP (glucose-dependent insulinotropic polypeptide) receptor agonist tirzepatide as Mounjaro®, and Novo Nordisk markets its GLP-1 receptor agonist semaglutide as Ozempic®.
“Overall, we continue to believe that injectable anti-obesity medications will retain the majority of market share (roughly 80%, based on our estimates) in the United States due to the high potency of injectables coupled with a more elevated U.S. BMI population,” Andy T. Hsieh, PhD, a partner and biotechnology analyst with William Blair, wrote in a research note.
Beyond competitive pricing and lower manufacturing costs, Lilly has emphasized a convenience advantage over oral Wegovy—starting with its public announcement of the approval, whose headline referred to Foundayo as “the only GLP-1 pill for weight loss that can be taken any time of day without food or water restrictions.”
While Foundayo can be taken morning, afternoon, or evening, oral Wegovy, by contrast, requires patients to take the pill with up to 4 ounces of water on an empty stomach as soon as they wake up, then fast for 30 minutes before they can eat or drink.
“Accordingly, we expect Foundayo to blunt the uptake of oral Wegovy upon its availability (starting on April 6), though oral Wegovy retains a pricing advantage,” Hsieh concluded.
Huynh of RBC Capital agreed, citing a survey by his firm of about 200 patients, payers, and prescribers: “Our recent survey indicated that Foundayo would be a preferred oral option amongst patients since it has no dosing restrictions.”
Not so, Novo Nordisk CEO Maziar (Mike) Doustdar told CNBC last month: “People are really interested because it’s the most efficacious pill right now in the market.”
Novo Nordisk cites efficacy
Novo Nordisk sought to reinforce that message via an announcement trumpeting that its 25 mg dose of oral Wegovy showed “significantly” greater mean weight loss than the 36 mg dose of Foundayo, according to a population-adjusted indirect treatment comparison using data from two clinical trials:
- OASIS 4 (NCT05564117), a 307-patient randomized study which evaluated once-daily oral Wegovy 25 mg in overweight or obese adults with at least one self-reported unsuccessful dietary effort to lose body weight, to measure their percentage change in body weight and whether it was ≥5% at the end of treatment at week 64.
- ATTAIN-1 (NCT05869903), a 72-week, randomized, double-blind, placebo-controlled trial comparing the efficacy and safety of orforglipron (6 mg, 12 mg, and 36 mg) as monotherapy vs. placebo in 3,127 adults with obesity, or overweight with at least one of the following comorbidities: hypertension, dyslipidemia, OSA, or cardiovascular disease, who did not have diabetes.
Novo Nordisk plans to present details of its study, called ORION, at the Obesity Medicine Association’s annual Obesity Medicine 2026 conference, set for April 10-12 in San Diego.
News of the FDA approval for Foundayo caused Novo Nordisk shares to dip 0.1% Wednesday from DKK 231.15 ($35.65) to DKK 230.90 ($35.61). But the shares finished the trading week climbing nearly 3% Thursday to DKK 236.90 ($36.53).
U.S. and major European markets were closed on Friday in observance of Good Friday.
Foundayo is the fifth prescription drug to be authorized under the FDA’s Commissioner’s National Priority Voucher program, through which the agency awards vouchers to drug developers whose work will address a health crisis in the United States, deliver more innovative cures, address unmet public health needs, and increase domestic drug manufacturing as a national security issue.
The approval came nearly 10 months ahead of Foundayo’s target decision date of January 20, 2027, under the PDUFA (Prescription Drug User Fee Act) program, and just 50 days after Lilly filed a new drug application (NDA) for the oral obesity drug with the FDA.
Leaders and laggards
- Inovio Pharmaceuticals (NASDAQ: INO) shares nosedived 35% from $1.74 to $1.13 Thursday after the developer of DNA therapies to treat and prevent HPV-related diseases, cancer, and infectious diseases announced that it priced at $1.40 a share an underwritten public offering of 12.5 million shares of common stock, plus accompanying Series A and Series B warrants, each series enabling potential purchase of up to 12.5 million shares (or pre-funded warrants in lieu thereof). The dilutive offering is projected to raise $17.5 million in gross proceeds—$16 million in net proceeds, rising to $18.4 million if underwriter Piper Sandler exercises in full its 30-day option to purchase up to 1.875 million additional shares and all Series A and Series B warrants (1.875 million shares each series). Net proceeds are intended to fund a potential commercial launch of INO-3107, a recurrent respiratory papillomatosis candidate under FDA review with a target decision date of October 30, as well as a confirmatory trial for INO-3107 if required, pipeline development, and general corporate purposes.
- Oric Pharmaceuticals (NASDAQ: ORIC) shares tumbled 19% from $12.67 to $7.47 Wednesday after the cancer drug developer said it will advance rinzimetostat (ORIC-944) into a 600-patient Phase III trial (Himalaya-1 ) after generating positive data from its Phase Ib trial (NCT05413421) assessing rinzimetostat plus the Bayer (XETRA: BAYN)-marketed Nubeqa® (darolutamide) as a once-daily treatment for metastatic castration-resistant prostate cancer (mCRPC) in patients previously treated with abiraterone acetate (abiraterone). At a median follow-up of 4.9 months, the combination showed radiographic progression-free survival (rPFS) rates of 93% at 3 months, 84% at 4 months, and 84% at 5 months—rates consistent, Oric said, with the competitor PRC2 inhibitor currently in Phase III in post-abiraterone mCRPC patients and superior to available standard-of-care therapies showing rPFS rates of approximately 60% to 75%. Also, 47% of patients (7/15) achieved a PSA50 response, with 33% (5/15) confirmed, while 71% of patients (10/14) achieving >50% circulating tumor (ctDNA) reduction. Jefferies analyst Maury Raycroft, PhD, reported that some investors viewed rinzimetstat as “a better fit strategically” with Johnson & Johnson (NYSE: JNJ)-marketed Erleada® (apalutamide).
- Sangamo Therapeutics (NASDAQ: SGMO) shares climbed 20% from 25 cents to 30 cents between Tuesday and Thursday after the genetic medicine developer said it expects to complete this summer its rolling Biologics License Application (BLA) submission seeking FDA approval for isaralgagene civaparvovec (ST-920), a gene therapy candidate being developed to treat Fabry disease, subject to securing adequate additional funding, while continuing business development discussions for a potential Fabry commercialization agreement. Sangamo said it is advancing the chemistry, manufacturing, and controls (CMC) module ahead of completion of the rolling BLA submission. Since launching its rolling BLA submission in December under an Accelerated Approval pathway, Sangamo has submitted preclinical and clinical modules, as well as submitted its antibody assay companion diagnostic, designed to screen patients for eligibility with isaralgagene civaparvovec, to the FDA’s Center for Devices and Radiological Health (CDRH), seeking Premarket Approval (PMA).
The post StockWatch: Price War Dampens Lilly Surge After Oral GLP-1 Wins FDA Nod appeared first on GEN – Genetic Engineering and Biotechnology News.
